Time Warner Cable tries to cap broadband data usage--again

In Southern Texas, Time Warner Cable is offering customers $5 off their bill if they'll agree to a 5GB cap on data usage. Where have we seen this before?

Time Warner Cable is at it again.

The company this week announced the launch of a usage-based pricing plan in Southern Texas. The service is available to customers in San Antonio, Laredo, Corpus Christi, the Rio Grande Value, and the Border Corridor, the company said in a blog post.

Dubbed the Essentials Plan, the offering limits subscribers to 5GB of data usage a month in exchange for a $5 discount to their monthly bill. Time Warner Cable says customers can opt-in or opt-out of the deal at any time, and subscribers will get a "meter" to let them see where they stand over the period. Upon going over their limit, customers will be charged $1 per GB of usage, not to exceed $25 a month, the company says.

Time Warner Cable tried something similar a few years ago, and the plan failed miserably. The company's initial plan to cap broadband speeds--which it also kicked off in Texas--drew anger and concern from lawmakers, including former Rep. Eric Massa (D-NY), who promised to introduce a bill in Congress that would limit tiered broadband in areas where only one ISP was available.

Still, Time Warner Cable's old plans were slightly different. Whereas now it's offering a 5GB cap, the service provider launched it the first time in 2008 with 5GB to 40GB plans. In 2009, it announced plans to offer capped plans of up to 100GB.

The same year, Time Warner Cable said that it wanted to move towards tiered pricing because bandwidth usage was growing to the tune of 40 percent a year, and it was facing "increasing variable costs." After the outcry grew louder, however, Time Warner Cable abandoned its tiered pricing.

Time Warner Cable's director of digital communications, Jeff Simmermon, didn't shy away from his company's past in a blog post earlier this week. Simmermon acknowledged that his company's earlier usage-based plans "didn't go so well," and went out of his way to point out that the new plan is optional, and should be viewed as a money-saving opportunity for those who use little data.

Simmermon wrote:

Again: we know that when we attempted a usage-based billing plan before, it didn't go well. All participation in the Essentials plan is opt-in, with the opportunity to save a few dollars each month. It's not going to be for everybody, and that's fine--all Time Warner Cable customers will still have the option of selection an unlimited broadband plan.
This time around, Time Warner Cable might have an easier time selling its tiered pricing to customers. Back in 2008, usage-based pricing was rare. But nowadays, with most major wireless carriers forcing customers into tiered data, it's much more a part of life.
 

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